1. Field of the Invention
This invention relates generally to the field of petroleum reservoir exploitation, and more particularly, to a system and method for evaluating decision alternatives for a producing prospect or field.
2. Description of the Related Art
A petroleum production system may include a petroleum reservoir, a set of wells connected to the reservoir (or a set of reservoirs), and a set of facilities connected to the wells. The set of wells includes one or more production wells, and optionally, one or more injection wells. Each well has an associated path through space that extends from an initial location on the surface of the earth (or ocean) to a target location in the reservoir. The trajectory of (i.e., the locus of points that reside on) this path is referred to herein as the well plan. Each well may be perforated at one or more locations on its well plan to increase the connectivity of the well into the reservoir.
The output of the petroleum production system depends on its inputs, initial conditions, and operating constraints. The output of the petroleum production system may be described in terms of production profiles of oil, gas and water for each of the production wells. Initial conditions on the reservoir may include initial saturations and pressures of oil, gas and water. Inputs may include profiles of fluid (e.g., water or gas) injection at the injection wells, and profiles of pumping effort exerted at the production wells. Operating constraints may include constraints on the maximum production rates of oil, gas and water per well (or per facility). The maximum production rates may vary as a function of time. Operating constraints may also include maximum and/or minimum pressures at the wells or facilities.
The establishment of the wells and facilities of the petroleum production system involves a series of capital investments. The establishment of a well may involve investments to drill, perforate and complete the well. The establishment of a facility may involve a collection of processes such as engineering design, detailed design, construction, transportation, installation, conformance testing, etc. Thus, each facility has a capital investment profile that is determined in part by the time duration and complexity of the various establishment processes.
A commercial entity operating the petroleum production system may sell the oil and gas liberated from the reservoir to generate a revenue stream. The revenue stream depends on the total production rates of oil and gas from the reservoir and the market prices of oil and gas respectively. The commercial entity may operate its assets (e.g., wells and facilities) under a set of fiscal regimes that determine tax rates, royalty rates, profit-sharing percentages, ownership percentages (e.g., equity interests), etc. Examples of fiscal regimes include production sharing contracts, joint venture agreements, and government tax regimes.
A person planning a petroleum production enterprise with respect to a set of reservoirs may use a reservoir simulator (such as the VIP simulator produced by Landmark Graphics Corporation) to predict the oil, gas and water production profiles of a petroleum production system. The reservoir simulator may be supplied with descriptions of the system components (reservoirs, wells, facilities and their structure of inter-connectivity) and descriptions of the system inputs, initial conditions and operating constraints.
Furthermore, said person may use an economic computation engine (e.g., an economic computation engine implemented in Excel or a similar spreadsheet application) to compute return as a function of time and/or net present value. The economic computation engine may be supplied with: (a) a schedule specifying dates and costs associated with the establishment of each facility, and dates and costs associated with the establishment of each well (especially, production start dates associated with each well); (b) fiscal input data (such as inflation rates, tax rates, royalty rates, oil and gas prices over time, operating expenses); and (c) the production profiles of oil, gas and water predicted by the reservoir simulator.
The problem with this planning approach is that many of the input parameters supplied to the reservoir simulator and the economic computation engine are uncertain. It is difficult to know precisely the rock porosity field, or initial saturations of oil, gas and water in the reservoir. It is perhaps impossible to know exactly how long it will take or how much it will cost to drill, perforate and complete each well, or to establish each facility. Oil and gas prices are difficult to predict as are tax rates. Thus, a single run of the reservoir simulator and economic computation engine gives said person no idea of how the uncertainty in the input parameters is likely to affect his/her return on investment or net present profit value.
Each input parameter may be categorized as either a controllable parameter or an uncontrollable parameter. Controllable parameters are parameters subject to the control of the designer, constructor or operator of the petroleum production system. Controllable parameters include parameters such as the number of wells, the number of facilities, the size of facilities, the locations of wells, and the well plans. Uncontrollable parameters are parameters that are not subject to the control of the designer, constructor or operator of the petroleum production system. Uncontrollable parameters include parameters such as oil and gas prices, rock permeability and initial saturations of oil and gas. Said person planning the petroleum production enterprise is faced with the daunting task of selecting values for the controllable parameters that will maximize average profit and minimize uncertainty in profit in view of the uncertainty in each of the uncontrollable parameters. Thus, there exists a need for a computational system and method capable of improving this selection process and capable of providing the enterprise planner with better information as to the effects of parameter uncertainties on economic returns.